Final Links To Rome

Thanks for all the nice feedback on the stories about the Business Leadership Forum in Rome. There are two final links that may be of interest. Chris Barger at IBM has posted the audio for the podcast about the demos, Internet technology, and healthcare. You can play it from here. Also, if you like the printed word, there is a single pdf that contains all the stories in one 23 page printable document. You can find it here.

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories
Podcast
Transcript of podcast

Innovation That Matters (From Rome)

The Business Leadership Forum was quite an experience and is hard to summarize. IBM did a good job of organizing it and everyone there appreciated it and learned a lot — I certainly did. As with most conferences, a lot of the value was in talking to people at breaks. Dinner at the Vatican is next to impossible to describe. It was the proverbial "you had to be there" thing. Here are some of the key insights delivered by Sam and his speakers and panelists during the conference…

• Innovation is essential and what the 21st century is all about
• Change is faster and more disruptive than ever
• Globalization is inevitable
• Ubiquitous connectivity is breaking down physical borders and creating connections between people, economies, organizations and governments in ways that were never thought possible
• Businesses need to cultivate their uniqueness
• Businesses need to encourage employees to be multi-disciplined, collaborative, and global
• Innovation that matters comes from seeing problems differently and adding value quicker than anyone else
• Constant reorganization is futile but leaders must look at a company’s structure strategically, consider which pieces need to shift and then unfold change bit by bit
• Technology plays a leading role in innovation, but it isn’t the only factor
• What were once disruptive technologies now are commodities
• To innovate, CEO’s don’t need to control all the resources or build within their own frameworks. They need to partner and collaborate
• Governments can help spur innovation among the private sector
• Governments must be more flexible to respond to today’s business needs
• Restrictive governments try to defend and preserve what has been achieved in the past, but if they rely only on the strength of their past, they put progress in peril
• Governments need to open themselves to market and labor reforms to stay relevant and competitive in global markets
  
  Intro to Roman Rendezvous Stories
  Index to Roman Rendezvous stories

The Big Picture From Rome

The final afternoon of the Business Leadership Forum focused on the big picture — of both global political factors and technology. A panel included Karl-Heinz Grasser, Federal Minister of Finance for the Republic of Austria. He spoke about how governments can not only avoid being an obstacle to innovation and growth but also encourage competition thereby creating more jobs.
The panel was bullish about how the information revolution — ushered in by the microprocessor in the early 1970′s and the Internet of the 1990′s — has led to an explosion of new products
and new business models, However, there was a consensus that retaliation from poor economies and over-regulation by some countries could stymie the growth.
 

Mario Monti, President of Bocconi University and commissioner in the European Union for ten years, was quite optimistic about the EU — a market of 480 million people — and said that the EU itself is an innovation. He said that Europe is much more like the U.S. than it was. It is now a single market, has a single currency, and has been expanding market reach around the world. The shortcoming is that Europe, unlike America, does not yet have a constitution. This results in an economic disadvantage because the European community can not make a decision for the total. The European economy is not innovating quickly enough and in fact some countries are protecting the past at the expense of the future. Mario says it is time for "naming and shaming" the laggards through peer reviews. Then he got more specific — "Germany, France, and Italy are behind on liberalization of service markets and have resisted initiatives to increase competition". These three countries will have a negative impact on the Euro which in turn will hurt the rest of Europe. Mr. Monti’s presentation was sobering but hopeful. He said the EU has a lot of good features, that it can protect intellectual property but also move against monopolies such as Microsoft. The key to get innovation going in Europe is for the EU to innovate itself by completing it’s constitution.

Irving Wladawsky-Berger kicked off the final segment of the forum, which focused on the future.
IBM supports Linux because it is a great operating system for computers. Irving introduced Linus Torvalds the developer of Linux which he published as a student in 1991. Don Tapscott, a widely acclaimed author, who invented the term “paradigm shift”, then moderated the final panel which included Linus,
Nick Donofrio, executive vice president for innovation and technology at IBM, and Ann Mettler, executive director and co-founder of The Lisbon Council. It was a wide-ranging discussion. Linus is an incredibly humble guy. He said he has no vision, just looks 5 cm ahead before each step, and loves to solve technical problems. Linux is successful, he says, because both the development and the decision making are distributed — a "built-in meritocracy". Don asked why volunteers worked on Linux for no economic return. Linus said, “if you were all engineers, you would not be asking that question”. Open source software is viable in most all software areas, with the only exception being niche markets which are too small to get adequate collaboration. "Open source will take over most all infrastructure".

Ann said there is a huge gap between businesses which are moving ahead rapidly and societies which feel left behind. The key problem is that the economy is 70% services but the regulations and governance are still based on an industrial model. She believes that government should learn how to innovate from businesses. "Politicians are clueless about the discussion of the past day and a half". She says that businesses need to share their leanings with society. The labor market in Europe is flat because companies do not want to hire and that is because the laws are so onerous. "You can hire but you can’t fire". Labor reform is needed desperately.

Nick says’ It’ s all about change”. IBM is doing a balancing act by supporting both open things and proprietary things. The company is generating a lot of patents but also giving away a lot of patents to move the ball forward in key markets such as healthcare and education. "The world can move ahead faster if the OS is Linux — it is good enough and a "blow for freedom". A California venture capitalist asked about business ethics and Nick was very aggressive in his response saying it was not optional for companies to be totally and completely ethical in every respect. (Having been at IBM for 38 years, I can say I never ever had a  concern about ethics at the company). Nick summarized that anyone can innovate if they are willing to change. “If nothing changes, nothing changes”.
Sam wrapped up the conference by saying corporations need to be transparent. Their ultimate responsibility is to create value for the constituencies: stockholders, customers, employees.
He walks the talk.  

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories

Demos and Podcast From Rome

April 8, 2006

IBM had some demonstrations set up in the breakout areas at the Auditorium Parco della staffed by researchers and experts in various areas. There was a lot of interest during coffee breaks. After lunch before the final session of the forum got started I had interview with Chris Barger from IBM to talk about the demonstrations and also a few thoughts on the future of healthcare and the Internet. Here is the transcript and here is the podcast.

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories
Podcast
Transcript of podcast

Business Leadership Forum – Day 2 (part 2)

Following Nakamura-san at the Business Leadership Forum would not be easy but
Sunil Bharti Mittal, CEO of Bharti TeleVentures Limited had quite an amazing story to tell. Bharti is India’s leading mobile operator and one of the top five companies in India. Revenue per month per person has shrunk from $30 to $8 and he believes it will go to $3-$4. The good news is that the number of users has gone from 2 million to 90 million. India is a huge consumption economy because there are so  many young people — 50% are under 25. He expects mobile phone users to grow from 90 million to 300+ million by 2009-2010 and his strategy to address the market has been to give away everything except the customer ; i.e. outsource everything except the customer relationship. IT was outsourced to IBM — a $1 billion contract. Networking was outsourced to Nokia & Ericsson. Call centers were outsourced to an IBM joint venture in India. Mr. Mittal said their growth (1 million new customers per month) could not be achieved without having outsourced to top partners. Complete alignment is achieved and the business model becomes predictable. Innovation in many areas including “Lifetime Validity” where incoming calls are free to customers for life. The theory is simple, if people receive a lot of free inbound calls, they will eventually *make* calls, which are not free. His goal is for his many partners to be happy — not to laugh but to smile. He hopes to grow from 7 billion minutes per month to 20 billion.
 

Mr. Yang Mingsheng, President and CEO of the Agricultural Bank of China, was the only speaker who did use English but the simultaneous translation to Japanese, French, Italian, Spanish, Russian, German, and English allowed all of us to hear what he had to say — which was a lot. The bank has 500,000 employees and 28,000 branch offices. Although I could not understand a word of what he was saying without the headphones, I could tell that the speaker was very articulate, enthusiastic, and confident. 95% of all bank services are available online. The bank has 400 million depositors, 12.4 million outstanding loans, and 220 million credit cards issued. They have introduced many e-banking and mobile products to their customers. This is being done by centralizing IT infrastructure. Mr. Mingsheng is both a ceo and a member of government. For hobbies he writes poetry and plays the violin. His speech covered every aspect of consumer and business banking services. I don’t think a similar presentation by Citigroup or JP Morgan Chase would much if anything that ABC isn’t also doing.
 

Pierluigi Bernasconi, CEO of an Italian electronics retailer called MediaMarket. The company is the No. 1 consumer electronics retailer in Europe with 66 stores in Italy, more than 500 stores in more than a dozen European countries, and a new web-based business in Germany. One of their stores is the largest in the world — it has six floors of consumer electronics products. Steady growth over the past decade has taken them from $4 to $16 billion. They have taken an innovative business model approach whereby they have two different store brands (MediaMarket and Saturn) that compete with each other. They believe that "self competition" results in better service and price to the consumer. Fifty million people per month spend time in one of their stores.  Mr. Bernasconi described an intensely competitive environment in Italy from 4,000 photography shops, 6,000 telephone stores, e-retail sites, hyperStores, and in the future new channels such as Digital Terrestrial TV.  In spite of this the company continuously outperforms the competition and gains market share. They have been using the web for sales and communications since 1995. Utilizing advanced IT the company has integrated all their distribution channels. They believe that communication is key and will result in customers thinking of MediaMarket or Saturn as the first choice as a place to get information and subsequently purchase. Their strategy is to exploit multi-channel strategies — tying together so a person can call from land line or mobile, surf via the web  connect via digital terrestrial set top box, or visit in person and all the experiences are recognized and tracked.
 

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories

Business Leadership Forum – Day 2

Day two of the Business Leadership Forum at "the auditorium"opened with a big-screen video made for the event by Tom Friedman, author of The World Is Flat: A Brief History of the Twenty-first Century. Less than four hundred years ago, people still thought the world was flat and that ships would “fall off” the globe if they went too far. Then people figured out that the world was round, not flat. Now we are all realizing, thanks to Tom’s book, that the world is indeed flat. Tom Friedman totally gets it and tells it very clearly.

1989 marked the fall of the Berlin Wall and the rise of Windows. This was followed by Netscape going public in August 1995 which triggered the dot-com boom
which triggered massive over-investment in fiber optic cable which enabled extremely low cost transfer of information on a global basis. A revolution in web applications enabled collaboration using interoperable standards-based protocols.
These three things flattened the world and brought us from the industrial age to the information age. The end result, Tom says, is that when the world is flat, whatever can be done, will be done.
The only question is "will it be done by you or to you". He says it takes an innovative flare, not vanilla ice cream — which everybody can make — but "whipped cream with a cherry on top".

Kunio Nakamura, President of Matsushita Electric Industrial Co., Ltd. (otherwise known to most of us as Panasonic) with classic Asian sincerity, paid great homage to IBM for all that his company had learned and how it was supported during a significant transformation. Matsushita was founded in 1918 and now has sales of $75 billion with $3.4 billion in profit and 335,000 employees. Their management philosophy is that the company is a public entity, that the customer comes first, and to start each day anew.
Their largest single product is TV’s but it is only 8% of revenue. The company was in crisis condition in 2000, reached the survival level in 2006, and plans to achieve global excellence by 2010. A key element of this comeback is management innovation, a key part of which is using IT to drive productivity. This may seem obvious but Nakamura-san pointed out that culturally productivity was thought of as something that can be nudged by maybe 10%, whereas American companies think of doubling and tripling of productivity. He said Matsushita wants to change from a lead ball to a soccer ball. I have heard many CEO’s describe corporate strategies over the years but never have I seen a CEO use the terms “IT” and infrastructure as extensively as Nakamura-san. He outlined how the company plans to invest $1.5B in IT over five years to integrate their procurement, production, distribution, sales & services from material & component suppliers all the way through to customers. He plans to use IBM as the company’s innovation partner.

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories

Dinner at the Vatican

The shuttle buses departing from the Auditorium Parco della Musica each had a sign indicating the language of the onboard tour guide (the entire Business Leadership Forum was simultaneously translated and available to all attendees through headphones in Japanese, French, Italian, Spanish, Russian, German, and English). The route from the auditorium took us through the Olympic Village which was built for the 1960 Games. The guide on the "English" bus was superb and she pointed out the many architectural features along the route and also the history of Vatican City.

The Vatican is a landlocked enclave in Rome, but it is actually the world’s smallest sovereign state (country). Beyond the territorial boundary of Vatican City, the Holy See has authority over twenty-three sites in Rome and five outside of Rome, including the Pope’s summer residence at Castel Gandolfo. The Vatican was closed to the public when we arrived. I had been there some years ago along with many thousands of other visitors. It was a unique feeling to be there with a small crowd of five-hundred. Being divided into small groups of a dozen or so made the experience very special — a lifetime memory for all of us.

The Vatican Library is home for many of the world’s rarest books and documents.The library has more than 150,000 manuscripts, including the four oldest surviving manuscripts of the Roman poet Virgil dating from the fourth and fifth century AD; and the oldest known manuscript of the Bible, written in 350 AD. There are also more than a million books, including 8,000 published during the first 50 years of the printing press. Virtually all civilizations and cultures in the history of humanity are represented somewhere in the Vatican Library. The wealth of content is phenomenal and scholars from all over the world are deeply interested in studying it in detail. The result will be an advancement in the general understanding of the history of the world. That is the good news. The bad news is that due to the cost of travel and the physical limitations of the Library to accommodate visiting scholars, only about 2,000 scholars per year can actually visit. Fortunately, a number of technical collaborations have focused on how to both preserve the treasures of the Library and make them more accessible to scholars. IBM developed a digital library service to extend access to portions of the Library’s collections to scholars worldwide. (more on the project here).

Walking into an empty Sistine Chapel is hard to describe. The chapel is 135 feet long and 44 feet wide. The paintings are awe inspiring. It took Michelangelo di Lodovico Buonarroti Simoni (March 6, 1475 – February 18, 1564) four years to create the 68 foot high fresco ceiling. Our tour guide happened to be an artist and she herself was in awe of the art and knew an amazing number of details about every aspect of the incredible room. We spent nearly an hour listening and craning our necks to try to absorb what we were seeing. One part of the "creation" panel contains an image that depicts the various parts of the human brain. It has been only recently that the image has been validated as being an accurate depiction. When Michelangelo painted the ceiling in 1512 he certainly had no MRI’s or medical texts to refer to.

Cocktails in the courtyard outside of St. Peter’s Basilica and dinner in the Braccio Nuovo Gallery at the Vatican were beyond outstanding. The blessing was offered by the president of Vatican City, who is also a cardinal. His eminence then thanked IBM for the digital library project and said it was that generosity that inspired them to make an exception and allow a formal dinner in the Vatican for IBM and the BLF guests. He also reminded Sam that there were still many thousands of manuscripts left to digitize. The outstanding food and wine were accompanied by a string quartet which played a selection of works from the great masters: Bach, Pergolesi, Boccherini, Mozart, Haydn, Beethoven, Schubert and Schumann. It was an evening to remember forever.

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories

Business Leadership Forum – 1

The shuttle buses dropped us off and we walked a few hundred feet through a large courtyard to the Auditorium Parco della Musica. It is quite an impressive place and of the thousands of "auditoriums" in the world, only this one has the url of http://www.auditorium.com. The "city of music" lies outside of Rome’s densely-packed historic center where such a facility could never have been built. Four hundred trees surround the beautiful buildings where 3,000 spectators can enjoy concerts of all kinds — from classical to jazz and rock.

IBM hosted it’s fourth Business Leadership Forum at "the auditorium" earlier this month, and it was attended by several hundred of "the world’s leading thinkers from across business, industry, government and academia", representing more than 50 countries. The forum facilitated two days of discussion about innovation and the challenges facing businesses in the 21st century.

IBM Chairman and CEO Sam Palmisano kicked off the meeting by saying that innovation is not optional for the leading institutions of the world — businesses, schools, hospitals, and governments. “The bottom line of all this is that innovation is really a ‘must do’ unless we want to live in an environment that’s commoditized and not unique, not differentiated”. Sam’s point was that if organizations focus only on taking out costs, they will be doomed with very low profits if not extinction. Everyone agrees that Innovation starts at the top and Sam practices what he preaches — not just by innovating in technologies (IBM turning out more patents year after year than any company in the world), but by innovating in strategies and business models. For example, it was Sam who led the charge to transform IBM from a hardware company to a hardware, software and services company. Especially the latter, when he acquired Price Waterhouse Consulting and smoothly integrated it into the IBM portfolio of services. He also led the sale of the PC business. Some people viewed it as simply a "sale" but in reality it was a highly innovative change to the IBM business model — selling off a low margin business but retaining the services aspect of it and at the same time gaining a stronger foothold in the Chinese market opportunity.

Note: See BusinessWeek’s story about The World’s Most Innovative Companies.

Sam then introduced Lord Brown, group chief executive at bp. The company had more than $20billion in profits for 2005 and is moving to even bigger numbers in 2006. Lord Brown described many innovative aspects of the company but I was most impressed with how they are using computer simulation to continuously increase the amount of oil they are able to extract from their drillings. He also described ambitious goals to put the hydrocarbon pollutants that come out with the oil back into where the oil was extracted, thereby reducing global pollution.

At the end of day we all got back in the shuttles to head to the Vatican.

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories

Roman Geocaching

I was anxious to get going so I quickly selected three geocaches that were closest to the hotel — Forum’s Revival, Coliseum, and Circus Maximus — downloaded the latitudes and longitudes into the Magellan eXplorist GPS and hit the street. It would have been much better if I had done some better planning, reviewed the logs of others who had found the caches, and selected caches that had maximum odds of me finding them. As they say, haste makes waste.

No map in hand, I headed down the Via Veneto toward the Forum following the arrow on the GPS. I was so confident there would be plenty of time that I stopped along the way at a small sidewalk cafe called Berzitello’s and enjoyed a plate of spaghetti. From there I meandered from street to street following the arrow until I reached the Forum. The IBM Business Leadership Forum focused on "Innovation that Matters". The Roman Forum obvioiusly focused on innovative structures — especially impressive considering that many of them are nearly two thousand years old. It is a marvel that they were constructed.

After taking a few false entries I finally got to the spot — or so said the GPS. There were a number of logical hiding places within twenty feet of the waypoint and I searched many of them. After more than a half-hour I gave up and headed for the Coliseum. At least I would find the other two caches. The Coliseum is an enormous place and there were thousands of people touring the ruins. The eXplorist said the cache was just 300 feet away. Sounds simple, but with the huge circumference and multiple levels of the Coliseum, it was not at all clear where the cache might be. If you are an experienced geocacher, you know what I mean. Sometimes you are a few hundred feet away but there is a river with no bridge in between. After an unplanned tour of most of the Coliseum, I found the spot, but not the cache. The latitude/longitude) was near a meadow and a wall just a couple of hundred feet from the main entrance to the Coliseum. After a half hour, I reluctantly gave up. Sound familiar? Well, at least I will find one of the three. Off to walk to the Circus Maximus.

This one should be easy, I told myself. Out in the open, nothing tricky about it. I got to the exact spot and searched high and low. Empty handed again. The good news is that I logged quite a few miles of walking on a sunny day. The weather was perfect. After meandering through the streets of Rome back to the Via Veneto and the hotel, I went straight to geocaching.com and read the logs of people who had found (or attempted to find) the three caches. If only I had done that *before* the search. It was tempting to head out again but the day was late and the miles of walking were enough — and I had a plan for the morning.

Since I knew exactly where to go I knew I could hire a taxi for an hour, get to all three cache locations, and still get back in time for the opening of the Business Leadership Forum. Forum’s Revival was still no piece of cake but I was able to find it in less than ten minutes. I signed the logbook, removed a travel bug, hid the tupperware container back in it’s place, and headed back to the taxi. At the Coliseum, I went to the exact same spot as the afternoon before and recognized all the clues from the logs — but still could not find it — a big dissappointment. On to Circus Maximus to look for the microcache. Traditional caches are in tupperware containers or ammo cans. Microcaches are much harder to find — they are usually black 35mm film containers — easy to hide in a very small place, in this case in a three-foot high wall behind a loose stone. With two out of three finds, I declared victory, headed for the hotel, put on a tie and took a shuttle to the Auditorium Parco della Musica where Sam Palmisano kicked off the day.

As usual, I apologize for being a poor photographer, but I do have quite a few pictures to share here on flickr.

Intro to Roman Rendezvous Stories
Index to Roman Rendezvous stories

Behind on the Blog

A colleague at a board meeting in NY this morning reminded me that I am behind in writing about what I learned in Rome. He is right, I am definitely behind but committed to write the stories previously outlined. So much to do, so little time. e-tirement is challenging!